Seeds of dozens of political crises in the years ahead are being sown at this moment as coalition talks begin
The venue for Fianna Fail and Fine Gael’s historic coalition talks could not be more appropriate.
The spacious room in Agriculture House on Dublin’s Kildare Street is the same one used for meetings of the National Emergency Coordination Group, the cross-government body mobilised to respond to extreme weather events. Negotiators from both parties sat down there this week to discuss how to respond to an emergency on an entirely different scale.
The detail of their much-anticipated framework document is being hammered in person with social distancing rules applied. “That’s been done since the civil war,” joked one source who is heavily involved. All the usual buzz words are trotted out by those taking part — ‘workmanlike’, ‘cordial’ and ‘a unity of purpose’.
Despite the delay in getting the document finalised, those involved say matters have progressed more quickly because of Covid-19 has removed many of the ideological logjams that might have existed — for now, at least.
While much of the document’s contents have leaked over the past week, we are told to expect a document that will signal significant policy shifts by both parties. “The tone and pitch will surprise people,” says one source.
There will be an introduction setting out the grave situation we are in and the need to ‘reboot the economy’, followed by various broad commitments under headings like housing, health, and so on. The document will be less than 20 pages.
All those involved say it will be squarely aimed at trying to get the Greens, Labour and Social Democrats on board, while studiously ignoring the elephant in the room that is Sinn Fein. Its housing spokesman Eoin O Broin correctly noted this week that the two parties appear to have adopted the Sinn Fein manifesto. A Fine Gael Cabinet member was more blunt: “All the policies that were in everyone’s manifesto except Fine Gael’s.”
Meanwhile, civil servants in the Departments of the Taoiseach, Finance and Public Expenditure have begun preliminary work on a national recovery plan. “That will say where the economy is at, what we need to do to fix it and how we pay for it,” said one official. “That would be on the desk of the next Government.”
The recovery plan that ends up being published by the next Government is likely to be subject to significant political tinkering — much to the chagrin of the mandarins.
Leo Varadkar has already pledged no return to the post-bailout era of austerity and has even mooted tax cuts. That’s not going down well with the bean counters. “I think that’s a hostage to fortune, there won’t be cuts to spending but whatever way you look at it you’ll come out with an increase in debt and deficit and that has to be paid for,” the official said.
Indeed how to pay for it all is where the problems will undoubtedly emerge in the coming years, along with some unpalatable decisions that will have to be made in the medium term.
Take the pandemic unemployment payment, the €350 a week welfare benefit paid out to over a half-a-million who have suddenly found themselves out of a job. The new Government will have to begin scaling this back even as thousands remain unemployed as businesses go to the wall. This is causing great angst among officials not only over how to unwind it but also chase down people for money they should not have got. Last week nearly 2,000 people were incorrectly told their payment was being stopped. The Department of Social Protection apologised, but there will be no apologies for thousands of others who will be pursued for any overpayments. Whoever is appointed Social Protection Minister is likely to become a deeply unpopular figure in the next Government.
Then there is the temporary wage scheme subsidies on which those temporarily furloughed from work are not paying any income tax or USC. Revenue will want this money eventually and will be taking it out of people’s pay packets when they return to work. Asked for detail on how this might work last week, Government officials could offer little other than to say any liability will be spread out over the tax year. You can expect lots of stories about workers facing ‘tax bombshells’ next year. They will make uncomfortable reading for whoever is the Finance Minister.
It’s not likely to be any easier for a Children’s Minister who will have to explain to parents why, for the time being, they have to start paying second mortgages to put their children in creches when they reopen. Fianna Fail and Fine Gael are discussing a pilot scheme for a state childcare system but it will likely be years before it is rolled out — if at all.
The next programme for government will have plenty of nice language about healing the wounds caused by this pandemic and its economic fallout by getting our people back to work and creating a more egalitarian society.
But when the immediate crisis is over and the debt pile caused by it continues to accumulate, the coalition government involving Fianna Fail and Fine Gael will have to decide how to pay for it.
That will expose the ideological division between the two parties that have existed for nearly a century.
While many rightly point to the obvious similarities between them, there is a reason they have been governed together. Fianna Fail will never stop fiercely defending the welfare supports it pioneered and the need for the State to intervene in a whole swathe of sectors. By the same measure, Fine Gael will never stop believing the State should get out of the way, while ensuring people pay less tax.
“The trick is to get as much agreement as we can on this side of taking office to ensure those differences are addressed now so you don’t end up not being able to address them at a Cabinet table in 12 or 16 months time,” said a senior Fianna Fail TD.
But the reality is that the very nature of this crisis and the emergency response to it means that the seeds of dozens of political crises in the years ahead are being sown at this very moment.